Banking and Finance Law Daily Financial Services Committee Republicans issue staff report on cybersecurity concerns
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Tuesday, January 12, 2021

Financial Services Committee Republicans issue staff report on cybersecurity concerns

By Colleen M. Svelnis, J.D.

The report focuses on cybersecurity during the COVID-19 era, especially with the proliferation of remote work and virtual interactions.

Ranking Member of the House of Representatives’ Financial Services Committee, Patrick McHenry (R-NC) and Rep. Andy Barr (R-Ky) have issued a staff report on cybersecurity in the COVID-19 era. The report, Securing the New Normal: An Examination of Cybersecurity Issues Related to Remote Work and the Transition to a Digital Supervisory Relationship, describes how the coronavirus pandemic and related relief programs created an environment ripe for cybercriminal activity. Financial institutions were put in a position to balance the government’s interest in disbursing money quickly against their long-standing interest in implementing a robust system to prevent cyberattacks and scams. The federal financial regulatory agencies, who were dealing with a new threat environment as their employees shifted to remote work status, were tasked with both strengthening cybersecurity throughout the financial industry, and with respect to their own functions.

In September 2019, McHenry introduced H.R. 4458, the Cybersecurity and Financial System Resilience Act, to ensure regulators prioritize cybersecurity efforts. (see Banking and Finance Law Daily, Sept. 25, 2019). The measure was signed into law on Dec. 27, 2020. The lawmakers state that this "detailed analysis on banking regulators’ efforts to protect against cyberattacks is needed now more than ever as cybercriminals continue to exploit the COVID-19 pandemic."

According to the Republican lawmakers, the reports that the Committee receives pursuant to H.R. 4458 in the summer of 2021 should "form the basis for hearings and oversight initiatives throughout the 117th Congress." They encouraged Congress to use the information to strengthen the cybersecurity platforms of financial regulators and institutions in order to better protect consumers.

Findings. Among the findings in the report were documents obtained by Rep. McHenry showing "an increase in COVID-related malicious cyberactivity since the federal workforce shifted to maximum remote work status." Cybersecurity agencies have identified a growing use of COVID-19 related themes in attacks by advanced persistent threat groups. In addition, financial regulators such as the FDIC reported a rise in the risk of cybercrimes like phishing, email fraud, and cyberattacks on third-party service providers and consumers that use mobile and online banking. The report also states that 25 percent of firms surveyed reported increased attacks targeting employees working from home.

The legislators concluded that Congress must prioritize cybersecurity oversight as remote work and virtual interactions will continue permanently in some form.

MainStory: TopStory Covid19 CyberPrivacyFeed FederalReserveSystem FinancialStability FinTech GCNNews IdentityTheft Privacy Enforcement

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